thumbnail of Oakapple Two Debenture 1

Oakapple Two Debenture 1

Return 7.25% IRR
Term 19 years
Total Invested £415k
272  investors
Maturity date 30 Jun 2034
thumbnail of Oakapple Two Debenture 1

Late payment

This investment has an overdue payment to investors. Please see the Updates section to see more information on the cause of the late payment and the company's current plans to resolve the late payment.

What does the company do?

Oakapple Two plc is a company set up to own and manage a portfolio of roof-mounted solar PV systems installed on roofs throughout England. From early 2012, Oakapple Renewable Energy (the solar developer behind the project) worked with one of the UK’s largest national house builders to install roof mounted solar panels on the homes they are building across the UK. As well as lowering energy bills, the solar panels help to increase the share of renewable electricity in the UK’s grid.

The portfolio owned by Oakapple Two consists of 63 rooftop solar PV systems with a total capacity of approximately 877 kWp, predominantly made up of larger roof-top systems installed on apartment blocks which provide electricity for the communal areas of the property. The company also owns a 48 kWp system on the pavilion of Leicester County Cricket Club and a number of smaller systems on individual residential homes.

The solar PV systems are accredited for the Feed-in Tariff scheme, which pays a fixed amount (rising annually with inflation) for each unit of electricity generated, plus an additional amount for the electricity exported to the grid. The company can choose to opt out of the export Feed-in tariff and instead agree a contract with an energy supplier when wholesale electricity prices are higher. The tenants or property owners get to use as much of the solar power as they can for free, helping to lower their energy bills, while the renewable electricity helps to lower the annual CO2 emissions from UK homes. In return, Oakapple Two collects the Feed-in Tariff received for the renewable electricity generated and is responsible for the ongoing maintenance of the solar systems.

Why did the company raise money?

This was the first investment on Abundance from Oakapple Two. The money raised in this investment offer was used to refinance part of the installation of approximately 877 kWp of rooftop solar PV.

How does the company expect to repay the investment?

Oakapple Two expects to repay investors from revenues it earns over the life of the investment from the generation and sale of electricity from its solar PV portfolio.

How is the company making an impact?

Oakapple Two is helping to increase the amount of renewable energy used in the UK’s electricity grid as we transition to a 100% low carbon energy future, as well as lowering energy bills for tenants and property owners.

48 kWp Solar Panel system installed on the pavilion of Leicester County Cricket Club
48 kWp Solar Panel system installed on the pavilion of Leicester County Cricket Club

Key terms

Issuer Oakapple Two
Return 7.3% IRR
Term period 19 years
Start date 1 July 2015
Maturity date 30 June 2034
Capital repayment Regular instalments
Amount raised £415,000.00
Return structure

The interest and capital is paid in equal instalments every 6 months over the life of the investment.

Secured or unsecured Unsecured
Early repayment options

The company can only make an early repayment of the investment in certain circumstances, such as a change of control of the company (for example, if some or all of the company was sold to a new owner) or a regulatory/tax requirement.

See the Debenture Deed for details of all circumstances in which the option for early repayment may be exercised.

Documents

Debenture Deed
Download PDF The debenture deed sets out the legal agreement and terms for this investment.

Payment schedule

This table gives a breakdown of what is due to be paid back on this investment, based on an example investment of £1,000.

Late payment

This investment has an overdue payment to investors. Please see the Updates section to see more information on the cause of the late payment and the company's current plans to resolve the late payment.

Payment schedule table
Payment date Capital repayment Interest Total
10 March 2016 £26.32 £17.60 £43.92
8 September 2016 £26.32 £17.60 £43.92
10 March 2017 £26.32 £18.20 £44.52
8 September 2017 £26.32 £18.20 £44.52
9 March 2018 £26.32 £18.85 £45.17
7 September 2018 £26.32 £18.85 £45.17
11 March 2019 £26.32 £19.50 £45.82
6 September 2019 £26.32 £19.50 £45.82
10 March 2020 £26.32 £20.20 £46.52
8 September 2020 £26.32 £20.20 £46.52
11 March 2021 £26.32 £20.90 £47.22
8 September 2021 £26.32 £20.90 £47.22
11 March 2022 £26.32 £21.65 £47.97
8 September 2022 £26.32 £21.65 £47.97
10 March 2023 £26.32 £22.40 £48.72
8 September 2023 £26.32 £22.40 £48.72
8 March 2024 £26.32 £23.20 £49.52
6 September 2024 £26.32 £23.20 £49.52
11 March 2025 £26.32 £24.05 £50.37
8 September 2025 £26.32 £24.05 £50.37
11 March 2026 £26.32 £24.85 £51.17
8 September 2026 £26.32 £24.85 £51.17
11 March 2027 £26.32 £25.75 £52.07
8 September 2027 £26.32 £25.75 £52.07
10 March 2028 £26.32 £26.65 £52.97
8 September 2028 £26.32 £26.65 £52.97
9 March 2029 £26.32 £27.60 £53.92
7 September 2029 £26.32 £27.60 £53.92
11 March 2030 £26.32 £28.55 £54.87
6 September 2030 £26.32 £28.55 £54.87
11 March 2031 £26.32 £29.55 £55.87
8 September 2031 £26.32 £29.55 £55.87
10 March 2032 £26.32 £30.60 £56.92
8 September 2032 £26.32 £30.60 £56.92
11 March 2033 £26.32 £31.70 £58.02
8 September 2033 £26.32 £31.70 £58.02
10 March 2034 £26.32 £32.80 £59.12
8 September 2034 £26.16 £32.80 £58.96
Total £1,000.00 £929.20 £1,929.20

Updates

These updates tell the story of the investment over its life and include information reported to investors by the company or council behind the investment. The updates are provided for informational purposes only and do not constitute an inducement or invitation to invest. Information provided at the time of publishing may no longer be accurate.

Oakapple Two has today made a payment to investors which represents the overdue capital amount from September 2023 (plus additional interest accrued on this overdue amount) and a small partial payment of the interest due up to March 2024. The company has not paid the capital or the majority of the interest due for this period. Please read below for an update from the company:

Dear investors,

We have spent the last few months performing a detailed review of the portfolio to identify and find solutions for the operational, administrative and financial issues that are causing the lower generation and income than we have forecast.

One of the key issues is the number of “offline” solar PV systems (ie. that are faulty and either in need of repair or that have communication issues). We held a number of difficult discussions with our Operations & Maintenance (‘O&M’) provider and decided that due to the unsatisfactory performance to date and high cost, they needed to be replaced. We held a number of difficult discussions with our Operations & Maintenance provider and decided that due to the unsatisfactory performance to date and high cost, they needed to be replaced. We have completed negotiations with Ethical Power who are an experienced provider that manage over 300MW of renewable energy assets in the UK and who will work with the resource available in our group to more efficiently carry out the monitoring and repair services required. Their aim is to get the number of “offline” systems down from a high of 16% this period to the industry average of approximately 5%. This will require some spend from us on site visits, repairs and spare parts.

An important administrative issue has been that 10 (14% by kWp capacity) out of the portfolio of 80 systems have still not yet been registered for the Feed-in-Tariff (‘FiT’) subsidy income with our FiT provider, Good Energy. In order to receive payments under the FiT scheme, the systems must be registered with Ofgem which administers the scheme. The registrations were previously being handled together by SSE (our FiT provider at the time) and our operations and maintenance provider. Despite us providing the required documentation at the time, issues in the SSE process meant the registrations were not processed. We subsequently changed FiT provider to Good Energy, who have been significantly more helpful. However, Ofgem have been continually changing the documentation requirements as time has passed making it more and more difficult for our team to provide the required information to register the systems. The main Oakapple director has now engaged directly with Good Energy to find a way to register these last few systems. The unregistered systems are generating electricity and the FiT income due on this generation since installation will be paid on successful registration.

The above two issues have resulted in our electricity generation and income being below our forecasts. At the same time our operational costs have been increasing significantly compared to forecast – particularly around O&M and administration costs - and this has led to an increasing squeeze on the company’s financial resources. While the Oakapple group has previously provided financial support to Oakapple Two plc, recently this has not been possible and this resulted in our inability to pay in full the previous Cash Return in September last year.

The main Oakapple director has now taken over the day-to-day management of the portfolio to ensure the issues identified are resolved as efficiently as possible. The repairs to a number of the systems is now due to take place and the full benefit of the investment into these O&M works should be evident in the second half of this year. At the same time, we should have clarity on whether we can successfully register the last systems for the FiT income. These should enable the generation and income performance to get back to levels that make the portfolio sustainable – to meet its debt payments and have sufficient level of cashflow to cover ongoing operational costs and an appropriate cycle of maintenance works.

The financial implication caused by these issues currently however is that on 8th March we owe Debenture holders (across both Debenture 1 and Debenture 2) approximately £62k made up of:

  • £21k – the overdue capital repayment from 8 September 2023
  • ~£1k – the additional interest that has accrued on the overdue capital repayment
  • £40k – the capital and interest due for this Cash Return period (8 March 2024)

We are only able to pay £25k of the total amount due as of 8 March 2024, which will cover:

  • The overdue capital repayment from 8 September 2023
  • The additional interest that has accrued on the overdue capital repayment
  • £3k to go towards the interest due for this Cash Return period

This means we are having to defer £37k of the current Cash Return (as allowed under the terms of the Debenture Deed). The plan is to catch this up as and when we can over the next 18 months from the backdated FiT income as we register the last systems and as our income increases from the expected improvements in the operations and maintenance performance.

We appreciate this update is not good news but we would like to assure you that we are very focused on monitoring and rectifying the issues identified. We will continue to provide detailed updates to you and will be in contact as and when there are any further material developments.

Kind regards,

Philip Taylor

Director of Oakapple Two plc

ERROR

An investment return from Oakapple Two Debenture 1 was paid today.

Oakapple Two has now made a payment to investors, which represents the interest element only of the expected investment return that was due on 8 September 2023. Please read below for an update from the company:

Dear Investors,

We apologise that we have only been able to make the payment of the interest element of the Cash Return payment to you today. It has come to light that some of our systems have not been properly operated and maintained recently, mostly due to the poor performance of our operations and maintenance service provider. A similar issue is impacting our other portfolios. We are therefore having to spend cash in the short term to make repairs on various systems that are currently offline in order to improve the energy generation and resulting future income we receive.

Due to the short term cashflow issue, we are therefore deferring the capital element of the Cash Return as allowed under the Debenture Deed. Our intention is to pay this as soon as is practical and we will be incurring Additional Interest on this until it is paid. We are undergoing a detailed review of the Oakapple Two portfolio to get on top of the issues and to optimise the generation from the systems. We will update you in more detail when we have completed this and have clarity on when we expect to be able to make the deferred capital and additional interest repayment. We have also withheld payment of the Oakapple group’s management fee for the same reason.

We must also apologise both to you and to Abundance for making this interest payment 4 days later and only communicating to you now. Particularly when Abundance has been chasing us for communication. The extent of the issue was only realised recently and time was needed to confirm that we were not being able to make the Cash Return payment in full.

Kind regards

Philip Taylor

Director of Oakapple Two plc

Oakapple Two has not made the payment that is due to investors today. Abundance is following up with the company to understand the reason for the delay and an expectation on when the company expects to be able to make the payment.

An investment return from Oakapple Two Debenture 1 was paid today.

An investment return from Oakapple Two Debenture 1 was paid today.

An investment return from Oakapple Two Debenture 1 was paid today.

An investment return from Oakapple Two Debenture 1 was paid today.

An investment return from Oakapple Two Debenture 1 was paid today.

An investment return from Oakapple Two Debenture 1 was paid today.

The Covid-19 crisis has unfortunately impacted the Oakapple Group in that a large part of the Group’s business, which is focused on property development and installing solar PV installations on new build properties, has been affected by the standstill in the construction industry. As a result, a number of staff (including those that help to manage this portfolio) have been furloughed for the time being until things return to some normality. Solar PV installations typically have few maintenance requirements, however for any systems that develop a fault during the general lockdown period we will not be able to send our O&M provider to investigate or make repairs. When it is safe to do so again, we will make arrangements with our O&M provider to resolve any issues. We will keep you updated with any material developments during this difficult time.

There were no operational issues reported in the period.

There were no operational issues reported in the period.

There were no operational issues reported in the period.

There were no operational issues reported in the period.

There were no operational issues reported in the period.

There were no operational issues reported in the period.

There were no operational issues reported in the period.

There were no operational issues reported in the period.

There were no operational issues reported in the period.

This investment closed today.

Oakapple Two Debenture 1 opened for investment today.